WMI did a tremendous about face on Tuesday, as shares plummeted
in the early going only to turn on a dime and close higher for
the day. WMI dipped as low as $27.38 before reversing course at
about midday. We were encouraged by the fact that the big block
trades occurred as the stock was heading higher in the afternoon
instead of when the stock was selling off in the morning.
Tuesday's action in WMI might have been the "cleansing" before
the next leg higher for the stock. Any weak shareholders probably
pulled the ripcord today, leaving only strong holders that will
probably not turn into sellers until much higher prices present
themselves. Those who might be thinking about adding WMI to their
portfolios could look to do so on a break through resistance at
$29 on volume of at least 2.5 million shares for the session.

Wednesday's Update:

Waste Management stayed out of the garbage heap on Wednesday,
despite selling pressure from the broader market. In fact, WMI
managed to breach resistance at $29 on outstanding volume of 4.8
million shares, more than twice its average trade. This tells us
that momentum players and institutions are scooping up shares of
our pollution control play. We are also encouraged by the fact
that other pollution control stocks are making new highs. This
means that this whole sector has become attractive, and with WMI
the clear leader of the group, we think it has more upside
potential. No substantial resistance should show up until the
$31.25 level, and even that shouldn't pose too much of a problem
since it was established last July. We also like the fact that
WMI's MACD just issued a buy signal and that volume has clearly
been coming in when the stock has been advancing. Traders that
might be interested in adding WMI to their portfolios could look
to do so as long as WMI can close above $29 again on Thursday,
accompanied by volume of at least 2.5 million shares.